Big Bank Downgrade By Moody's Imminent

Even as Moody is now about a week late on its Spanish bank downgrade where the banks are rated higher than the sovereign (which obviously is kept in check to prevent yields on bonds from soaring even more), here comes the next wholesale bank downgrade:

Looks like that fabricated 2 notch Margin Stanley downgrade (because 3 notches just won't do - those 4 months of Gorman-led "negotiations" made that painfully clear) is about to strike. The real question is: What Would Egan Who Do?

Some of Britain’s biggest banks are poised to have their credit ratings downgraded by Moody’s as soon as tonight as part of a wider reassessment of the health of the global banking industry, I can reveal.

Moody’s is expected to outline its verdicts about the creditworthiness of banks including Barclays, HSBC, JP Morgan and Royal Bank of Scotland.

My expectation is that Moody’s will announce the ratings decisions after the close of US markets today (at 10pm or thereabouts), although the timing of its statement could yet change and be delayed beyond today. Some banks may see their ratings unaffected.

The downgrades – which are expected to range in scope from one notch to three notches depending on the particular institution – have been anticipated for some time.

Nonetheless, news that they are now imminent is unlikely to have a positive impact on bank shares in Europe and the US today.

As I understand it, Moody’s plans to announce downgrades of many of the world’s big global capital markets banks in one tranche, and a number of big European banks in another tranche. Lloyds Banking Group, which is part-owned by the British taxpayer, is likely to fall into the latter category.

The other banks that fall into the former category as part of the review being undertaken by Moody's are Royal Bank of Canada, Credit Suisse, Goldman Sachs, Deutsche Bank, Macquarie, BNP Paribas, Credit Agricole, UBS, Morgan Stanley, Citigroup, Societe Generale, Bank of America and Nomura. It's possible that some of these banks won't have their ratings decisions announced tonight.

Unfortunately, that is exactly what is happening. Inevitably, the crisis greatly affects banks, increasing their losses and compromising their assets. The greatest risk is to "cut" the chain of payments and the economy to accelerate its deterioration. The situation is further complicated each week.

/I work for a large Investment Bank, we have known for the last month that MOODY's will downgrade us, and have been talking to clients about it. In the same way all other Investment banks (both UK and US ) to be downgraded tonight are aware of this. Priced in the market already.

China is still performing at >4% growth (more if you believe headlines) which is a relative tiger compared to the rest of the world.

A light that was turned on for me recently that made me more bullish on China (which I have been willing to crash) is they have generations of savings which they are now spending and the sheer volume of this could support expansion for another 5-10 years. They have regional towns with populations of >5 million where the population are just going nuts and spending all their forefathers savings.

In the long run clearly not sustainable, as the expenditure is purely consumption, but comparing them to Greece is a real stretch.

I've read the articles, but they have been notorious savers over the generations, so there is a lot of cash that the current generation has decided to start spending. That momentum apparently has years still before it even peaks. Colleague of mine has been out there for the last 8 mths.

In an statement from Boy Scout Troop 222 in Bumphuck Kansas, the troop leader has downgraded all US Rating Agencies to CCC- with cursory note of "These asswipes are paid by WHO?" Yeah, that's the ticket.

Is it perhaps a coincidence that RBS are having 'technical difficulties' today? My online banking is working, as far as logging in and stuff, but it can't give me an up to date balance or allow me to transfer any money elsewhere.

My ex-lodger is also with RBS and found that his money had not apparently appeared in his account this morning. He went into the branch and they let him take £150 out, even though his balance could not be confirmed even by the branch - with the stiff warning that if the withdrawal took him overdrawn beyond the amount available if/when his money finally appears, he'd be liable for all the charges.

Surely just bad timing that their computers are having a brainfart on the day they are gonna get a downgrade, though!

Just did. As far as I can tell at the 'send' end, I successfully transferred £10 from another account to the RBS one. Of course, until it will actually tell me what my current balance is, I don't know if the illusory fiat actually got there.

My missus says her phone banking isn't working, either. She's also with the RBS group, but a different bank 'brand' to me. Hers did, however, allow her to take her money out of the ATM (there was only 60 quid in there - payday not until next week), while mine won't.

Could just be a genuine computer fuck up, of course, but the timing is suspicious, to say the least!

Not surprised ... UK been a good bluff to keep it for so long and it is global.

If you take the overall rating system globally with all these downgrades whose rating is actually going up? Nobody then it is a global problem for sure. You can skip the EZ blame unless these consumer nations sole contribution in the world is to consume although they are not helping "we need you to consume baby".

Now is anybody's rating going up? You know hey this one is a better investment area than that one so lets raise that. I have not seen any of this so what gives? From articles it seems like China and India are not doing so well are they or any of the BRICS, the rouble in trouble too.

With 190+ countries and an ever growing number being downgraded and "0 being upgraded as a better investment opportunity".Now go and ask any rating agency for a list of countries they expect to upgrade in the near future .... is there any?